Illawarra Property Market: A 2025 Mid-Year Review

The Illawarra property market in 2025 is experiencing strong price growth, tightening supply, and rising competition, bucking some national trends of slower or varied growth. The market is supported by ongoing population spillover from Sydney, infrastructure developments, relative affordability, and government deposit schemes that increase buyer activity. Dwelling values in Illawarra increased by 0.9% in September 2025 with quarterly growth of 2.4%, the fastest pace in over a year, while listings and rental availability have sharply contracted, pushing rents up by around 30%.

Nationally, house prices are forecast to rise gradually by around 5.3% over the next six months and 5.6% through 2025, with units rising 4.5% by year-end and also by 5.6% next year. However, growth rates vary by region, with cities like Perth and Melbourne expected to perform above average. The Illawarra region is highlighted as a regional market likely to outperform due to its strong fundamentals, lifestyle appeal, and affordability relative to Sydney.

Key developments influencing the Illawarra market include supply constraints, with sales and rental listings falling sharply. Government policies like the Home Guarantee Scheme are enabling more first-home buyers to enter the market, escalating competition. Easing monetary policy and potential RBA rate cuts are boosting buyer confidence, and continued population growth from Sydney is underpinning demand.